Should People Be Allowed to Get Rich on Global Warming?

The ethical complications—and inevitability—of climate profiteering

May 15, 2019

The Trump administration does not usually acknowledge the reality of climate change. But it’s willing to make exceptions in certain cases—namely, where it sees that the coming planetary apocalypse might be profitable.

At a meeting last week of the Arctic Council, an intergovernmental forum for countries with territory in the region, Secretary of State Mike Pompeo refused to sign on to a document stating climate change posed a threat to the Arctic. But he was willing to speak at length about the economic promise of rapidly melting ice.

“The Arctic is at the forefront of opportunity and abundance,” Pompeo said, practically salivating over the area’s natural resources—minerals, gold, and oil among them. “Steady reductions in sea ice are opening new passageways and new opportunities for trade ... Arctic sea lanes could become the 21st century Suez and Panama Canals.”

It’s more than a bit grotesque to tout thecapitalist potential of a global crisis that threatens one million species, humans among them.But Pompeo is technically correct. Thanks to climate change, investment opportunities abound in the Arctic Ocean (at the edge of which, this past weekend, temperaturesreached84 degrees).

But such opportunities also extend far beyond Arctic shipping lanes. As wildfires intensify, private firefighting companies can charge a mint to Malibu celebrities seeking to protect their homes. As droughts spread, demand for companies offering water desalination will grow. As floods worsen and sea levels rise, more people will look to developers to raise and waterproof their homes.

Some of the economic activity that results from climate change adaptation will, of course, be necessary. But just as there have always been war profiteers, there will also be climate profiteers. The question is whether society can, and should, do anything to stop them.

Imagine you are a pharmaceutical executive whose company owns the patent on a drug that treats Dengue fever. To this point, your patent has had little use in the United States. But climate change projections suggest the mosquitoes that transmit Dengue are on the march, heading north as temperatures rise. Seeing an opportunity, you slowly, over the course of a few years, raise the price from reasonable to obscene—just in time for the flood of cases to hit.

This is a clear example of unethical profiteering, says Marion Hourdequin, chair of the Colorado College philosophy department and author of Environmental Ethics: From Theory to Practice. “In the Dengue fever case, the pharmaceutical executive takes advantage of others’ vulnerability to increase company profits, benefitting directly from increased climate-related risks and harms,” she says. “This is exploitative: it uses others’ vulnerability as a source of gain.”

But as the climate warms, there will be some wide moral gaps between one money-making scheme and another. What if, for example, I anticipate that some seaside towns will stop shoring up the coastline as the seas rise, and I buy up a string of houses that are likely to go from being near the beach to on the beach? Have I done something wrong? It’s not like I caused the sea level to rise, after all. Like the Dengue Fever drug lord, though, I would essentially be rooting for a problem that contributes to the suffering of millions. I am on Team Asteroid.

Pompeo’s example of ice-free Arctic shipping lanes carries some more confusing ethical issues. The shipping industry happens to account for three percent of all the world’s carbon dioxide emissions, meaning they played a not-insignificant role in actually helping open up those shipping routes. Then again, shipping through those shortened routes means the industry’s carbon footprint could actually shrink, even as their profits rise. Do we want to punish, or somehow curtail, that sort of profit generation if it also creates an ancillary benefit for the rest of us?

There are obvious ethical differences between rooting for climate change to continue and just trying to adapt to it. But it’s not always easy to make those distinctions in business practices. “There seem to be no sharp lines between simply responding to climate change through adaptation, taking advantage of climate change to develop new economic opportunities, and being actively invested in ongoing climate change,” said Hourdequin.

For more clear-cut examples, like our morally bankrupt pharmaceutical executive, the question is how we might curtail it. Legislators have been harping on the scourge of pharmaceutical price hikes for some time now, and though the conversation remains partisan, some Republicans, including President Donald Trump, are starting to align with Democrats on ideas to solve it. We are capable of picking sides when it comes to questionable capitalist practices.

“In cases where the temptation of profiteering is strong, certain safeguards could be useful,” Hourdequin says. “These would likely need to be domain-specific: real estate rules, pharmaceutical regulations, agricultural policies, and so on. In each of these domains, it might be possible to define more clearly what profiting from others’ vulnerability looks like, and how it might be avoided.”

This would not be easy. In 2007, as fraud and grift in Iraq and Afghanistan ran “into untold billions,” legislators attempted to close a loophole in the laws against war profiteering. (It wasn’t illegal to profit off of undeclared wars.) They failed. Any attempt to, say, institute a toll on Arctic shipping lanes, with the money going to the Green Climate Fund, would undoubtedly run into the considerable lobbying might of the industry.

The word “profiteer” evokes a certain mustache-twirling brand of evil, but clearly there would need to be some sober-minded efforts at defining before the attempts at reining in the practice could even begin. In a 2012 article for the Minnesota Law Review, Vanderbilt Law School professor J.B. Ruhl argued that it will be difficult “to lump the climate change winners into the same category as war profiteers and post-hurricane price gougers.”

Imagine a farmer that pours her savings into a new type of seed specifically designed to tolerate warmer temperatures: Much like the beachfront property speculator, her attempt at adaptation means she is now financially incentivized to hope the crisis remains unsolved. She does not, however, sound much like a “post-hurricane price gouger.” Or imagine someone invents a truly efficient and scalable way to pull carbon dioxide out of the atmosphere. Do we demand they provide this civilization-saving technology to the rest of us essentially for free, like the scientists whosold the insulin patent for one dollar? What if they refuse?

Dale Jamieson, a professor of environmental studies and philosophy at NYU, calls the potential climate profiteering examples, from shipping to Dengue drugs, “just business as usual.” The rich and powerful will always find ways to profit off of others’ misfortune. “The argument for capitalism has never been that particular acts are ethical,” he said, “but rather that a system in which each person seeks their own interests makes everyone—at least in aggregate—better off.”

Given that laissez-faire capitalism is largely responsible for global warming, there’s no moral—or practical—case for letting the system run its course, in the hopes that private innovation can somehow stave off catastrophe. We will have to increasingly restrain and punish the polluters, of course. But we may also have to make it a little harder to profit as the planet burns up.